Gates should be Microsoft CEO for a year, Schwab says

Bill Gates should serve as Microsoft’s chief executive officer for a year as the software company he co-founded seeks a replacement for Steve Ballmer, according to Charles Schwab.

The chairman of Charles Schwab Corp. spoke Wednesday at The Year Ahead: 2014 conference hosted by Bloomberg LP in Chicago. Ballmer said in August that he would retire within a year.

Gates, who was Microsoft’s CEO until Ballmer took over in 2000, said at a shareholder meeting yesterday that he and other directors have met with “a lot of CEO candidates.” The world’s largest software maker is seeking a new leader while it adopts a new corporate structure focused on devices and services. The board is seeking to narrow the list of CEO candidates to three to five, a person with knowledge of the matter said last week.

“I think it would behoove Gates to go back for at least a year,” Schwab said. “He’s the only guy who can really reshape the cultural aspects. Otherwise the organization will spit anybody out, anybody coming in.”

Peter Wootton, a spokesman for Microsoft, didn’t immediately respond to a request for comment.

External choices to replace Ballmer include Ford Motor Co. CEO Alan Mulally and former Nokia CEO Stephen Elop, among others, people with knowledge of the search have said. Because the board perceives the new CEO will have to lead change at Microsoft, the final choice is more likely to be an outsider, one person with knowledge of the search said last week.

Directors are also considering three internal candidates: business development and evangelism chief Tony Bates and Satya Nadella, who oversees the company’s cloud and enterprise business, as well as Chief Operating Officer Kevin Turner, people have said.

The board is aiming to have a final choice as soon as next month, three people said. Gates, Microsoft’s chairman, said yesterday he wouldn’t give a timeline for the decision.

Schwab returned in 2004 as CEO at the company he founded after he was asked back by the board. While he initially said he’d return for one year, Schwab stayed in the role until 2008.

“The only way we were going to resurrect the company was for me to come back and shatter some of the things that we had in the company that were cultural issues” that needed to be changed and modernized, Schwab said. “When you build up a culture, there’s really only one person who can knock it down.”

Michael Dell returned as CEO of his namesake company in January 2007, amid slowing profit growth and market share loss in personal computers. Dell had turned the reins over to Kevin Rollins for three years before ousting him and retaking the CEO job. Dell Inc. went private last month in a $24.9 billion leveraged buyout by Michael Dell and partner Silver Lake Management LLC.